Kristalina Georgieva from the IMF advocates for CBDCs as crucial instruments for financial transformation in response to rapid technological advancements.
Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), has highlighted the significant potential of Central Bank Digital Currencies (CBDCs) in reshaping the global financial landscape. Speaking at the Singapore Fintech Festival, Georgieva urged policymakers to actively consider and adopt the deployment of CBDCs. Echoing the words of her predecessor, Christine Lagarde, she emphasized that rapid technological advancements, such as the meteoric rise of ChatGPT, indicate the need to embrace such monetary innovations.
The global exploration of CBDCs
Various countries, including the United States, are currently studying the feasibility of CBDCs. While many acknowledge that their implementation may still be distant, the interest is undeniable. According to a survey by the Bank for International Settlements, 94% of surveyed central banks express interest in CBDCs. Georgieva highlighted that 60% of countries are considering their adoption, recognizing their utility in reducing the costs of cash distribution, enhancing economic resilience, and promoting financial inclusion.
The entrepreneurial approach of central banks
Georgieva urged central banks interested in CBDCs to adopt a more entrepreneurial mindset. She emphasized the importance of effective communication strategies, as well as incentives for distribution, integration, and adoption of CBDCs. Additionally, she underscored the crucial role of CBDCs in facilitating cross-border payments, a point also supported by Agustin Carstens, General Manager of the Bank for International Settlements.
Georgieva called on the public sector to provide further guidance to ensure the security and efficiency of CBDCs while avoiding fragmentation of the financial system. The IMF has also announced a CBDC handbook, explaining the different steps to begin exploring their implementation.